The Review School of Accountancy (ReSA) B44 Regulatory Framework for Business Transactions (RFBT) Practice Test

In Suspension of Payments, the validity of a creditors’ meeting rests on the weight of the claims represented, not just how many creditors show up. The meeting is quorate only when creditors representing at least three-fourths of the debtor’s total proven liabilities are present or representatively present. This ensures that decisions reflect the interests of the major creditors whose claims make up the bulk of what is owed.

A claim is considered proven when it is admitted by the court or recognized in the case; contingent or unproven claims do not count toward the total liabilities. If the required 3/4 by liability isn’t met, the meeting isn’t valid for transacting business and must be reconvened with sufficient representation.

The other options focus on fractions of the number of creditors or on smaller fractions of liabilities, which could allow a relatively small group with minor stakes to control decisions or fail to protect the major claimants. The chosen requirement best ensures substantial consensus among those with the largest financial exposure to the debtor.